RBC InvestEase Review 2024: A Big Bank Robo-Advisor

Many investors want to enjoy the benefits of smart and automated investing with robo-advisors.

There is an increasing number of robo-advisors in Canada. Most of the products are offered by newer names you might not be familiar with, and this doesn’t sit well with some investors. 

In my RBC InvestEase review, I will discuss a robo-advisor that one of the country’s oldest financial institutions launched. 

How RBC InvestEase Works

Here is the process for using RBC InvestEase:

1. Initial Assessment: As you begin your journey, RBC InvestEase provides a simple online questionnaire. This assesses crucial factors like your age, investment goals, financial timeline, and risk tolerance.
2. Portfolio Recommendation: Using your responses, RBC InvestEase’s algorithm, backed by its team of portfolio advisors, suggests an investment plan tailored to your needs.
3. Account Set-Up: Once you agree with the recommended portfolio or after any necessary adjustments, you proceed to set up an account. This can range from Tax-Free Savings Accounts (TFSA) to Registered Retirement Savings Plans (RRSP).
4. Investment and Monitoring: After funding your account, the platform allocates your investments according to the selected portfolio. Its team of advisors, combined with technology, continuously monitors the markets.
5. Periodic Rebalancing: As with many robo-advisors, RBC InvestEase periodically rebalances your portfolio. This ensures that the asset allocation aligns with your original investment objectives and any changes in market conditions.
6. Review and Reporting: You can log into your account dashboard at any time to check performance, make changes, or reach out for advice. The platform provides periodic reports as well.

Features and Benefits of RBC InvestEase

In this section of my RBC InvestEase review, I will discuss the main features and benefits that should tell you what to expect if you use this robo-advisor product.

Accounts Offered by RBC InvestEase

RBC InvestEase is a relatively new robo-advisor product. Currently, the robo-advisor does not offer too many account types that you can use. The robo-advisor offers three different account types, including:

• Tax-Free Savings Account (TFSA)
• Registered Retirement Savings Plan (RRSP)
• Non-registered investment account

The options seem somewhat limited if you compare them to most robo-advisors in the market, but RBC InvestEase plans to expand on this later on.

Portfolios Offered by RBC InvestEase

Opening an account with RBC InvestEase gives you a small questionnaire about your age, investment timeline, how much you would like to invest, and other relevant questions. The robo-advisor uses your responses to the questionnaire to determine your risk tolerance and understand your financial goals with your investments.

Based on your responses, RBC InvestEase recommends an investment plan based on your answers. 

RBC InvestEase offers five basic types of portfolios that range from conservative to aggressive growth portfolios. It crafts carefully selected ETF portfolios (Exchange-Traded Funds) to reflect your risk tolerance and goals in its recommendation.

1. Conservative Portfolio: This portfolio is designed for investors with a low risk tolerance, seeking modest growth and capital preservation. It primarily consists of fixed-income securities like bonds, with a smaller allocation to equities (stocks).
2. Conservative Growth Portfolio: Targeting investors with a somewhat low risk tolerance, this portfolio aims for moderate growth. It has a balanced mix of fixed-income securities and equities, with a slightly higher focus on bonds for capital preservation and income generation.
3. Balanced Portfolio: This portfolio is suitable for investors with a moderate risk tolerance, seeking a balance between capital growth and income generation. It typically has an even mix of fixed-income securities and equities, providing a blend of growth potential and risk management.
4. Growth Portfolio: Designed for investors with a higher risk tolerance, this portfolio aims for long-term capital growth. It has a greater allocation to equities, with a smaller portion dedicated to fixed-income securities to provide some level of diversification and risk management.
5. Aggressive Growth Portfolio: This portfolio is intended for investors with a very high risk tolerance, seeking the highest possible capital growth. It is heavily weighted towards equities, with a minimal allocation to fixed-income securities, resulting in greater potential rewards but also higher risk exposure.

Here is a table summarizing the five portfolios offered by RBC InvestEase, along with their fixed income and equity allocations. Please note that the specific allocations may vary and the percentages provided are approximate:

Portfolio	Fixed Income Allocation	Equity Allocation
Conservative Portfolio	70-80%	20-30%
Conservative Growth	50-60%	40-50%
Balanced Portfolio	40-50%	50-60%
Growth Portfolio	20-30%	70-80%
Aggressive Growth	0-10%	90-100%

Each portfolio is made with low-cost ETFs that include the following:

• iShares Core Canadian Short Term Bond Index ETF (XSB) – MER 0.10% 
• iShares Core Canadian Universe Bond Index ETF (XBB) – MER  0.10%
• iShares Global Government Bond Index ETF (CAD – Hedged) (XGGB) – MER 0.40%
• iShares Core S&P/TSX Capped Composite Index ETF (XIC) – MER 0.06%
• iShares Core S&P 500 Index ETF (XUS) – MER 0.11%
• iShares Core MSCI EAFE IMI Index ETF (XEF) – MER 0.22%
• iShares Core MSCI Emerging Markets IMI Index ETF (XEC) – MER 0.26%

RBC InvestEase Fees

In this section of my RBC InvestEase review, I will discuss the expenses you can bear if you use this robo-advisor. RBC InvestEase has a flat 0.50% management fee for its standard and responsible investing portfolios.

While both portfolios have the same base fee, the actual charges can differ due to the MERs of the underlying ETFs in your portfolio.

For Example: Let’s suppose David has a standard portfolio and the MER of the underlying ETFs in his portfolio is 0.26%. If he has invested a balance of $100,000 with RBC InvestEase, he can expect to pay a fee of 0.76% (0.50% + 0.26%). It translates to $760 per year in fees.

Another major expense you should know if you are using RBC InvestEase is the transfer fee. If you decide to move your account from RBC InvestEase to another financial product offered by another financial institution, RBC InvestEase will charge you $135 for the transfer.

That being said, RBC InvestEase does not charge any withdrawal fees, regardless of the type of account you have with the robo-advisor.

Customer Service and Support

A significant factor that distinguishes RBC InvestEase from many other robo-advisors is its customer service. With a rich history as one of Canada’s oldest financial institutions, RBC has garnered a reputation for strong customer relations.

1. Dedicated Team: There’s a dedicated team of accredited portfolio advisors available, bridging the gap between traditional banking and the digital age.
2. Hybrid Robo-Advisor Model: This approach allows investors to benefit from the efficiency of robo-advisory while having human experts at their disposal for queries or concerns.
3. Multiple Channels of Communication: Whether you prefer to communicate through email, phone, or live chat, RBC InvestEase offers a range of options to get in touch.
4. Educational Resources: In addition to direct support, RBC InvestEase has a range of online resources, from FAQs to detailed guides, to help investors at all stages.

RBC InvestEase Responsible Investing Portfolios

RBC InvestEase also offers responsible investing portfolios that you can use if you want to invest in companies with a high environmental, social, and governance rating. The responsible investing portfolios exclude companies involved with controversial businesses like tobacco, manufacturing weapons, or firearms.

Its responsible investing portfolios can include the following ETFs:

• iShares ESG Canadian Short Term Bond Index ETF (XSTB) – MER 0.20%
• iShares ESG Canadian Aggregate Bond Index ETF (XSAB) – MER 0.20%
• iShares ESG MSCI Canada Index ETF (XESG) – MER 0.23%
• iShares ESG MSCI USA index ETF (XSUS) – MER 0.28% 
• iShares ESG MSCI EAFE Index ETF (XSEA) – MER 0.34%
• iShares ESG MSCI Emerging Markets Index ETF (XSEM) – MER 0.36%

RBC InvestEase constructs each client portfolio based on the client’s goals, time horizon, risk tolerance, and investing experience. While the two options may seem limited, there can be various combinations and weightings depending on each client.

Is RBC InvestEase Safe and Legit?

RBC InvestEase has to be one of the safest and most legitimate robo-advisors you can consider. RBC Direct Investing Inc. is the custodial broker for the robo-advisor. It holds all the funds you invest with RBC InvestEase.

RBC Direct Investing Inc. falls under the regulated institutions by the Investment Industry Regulatory Organization (IIROC), and it is a member of the Canadian Investor Protection Fund (CIPF). CIPF insures investor capital for up to $1,000,000.

Additionally, RBC InvestEase provides you a 100% online security guarantee. If you experience any losses due to unauthorized transactions made using your account, RBC InvestEase will cover all the losses.

RBC InvestEase Alternatives

When I was thinking about alternatives that I could talk about in my RBC InvestEase review, I could think of Wealthsimple, BMO Smartfolio, and Quest Wealth as the best options to consider.

RBC InvestEase vs. Wealthsimple

Wealthsimple is the most popular robo-advisor in Canada. It has been around for six years at writing, and it continues to perform well. Wealthsimple offers a tiered management fee of 0.50% per year for account balances between $1 and $100,000.

It reduces the fees to 0.40% for accounts with a more substantial balance. RBC InvestEase levies the flat rate of 0.50% regardless of your account balance. Wealthsimple also has a lower minimum account balance requirement of $1, compared to $100 for RBC InvestEase.

Wealthsimple also has zero transfer or withdrawal fees. RBC InvestEase charges a hefty $135 for transferring out of your account. If you want to know more about Wealthsimple, you can check out my Wealthsimple Review.

RBC InvestEase vs. BMO Smartfolio

BMO Smartfolio is the only other robo-advisor in the market offered by a Big Five Canadian bank. BMO Smartfolio is the first robo-advisor provided by a reputable financial institution, but it lacks in a few ways compared to RBC InvestEase.

RBC InvestEase has a lower fee due to its strategic partnership with iShares for a massive selection of ETFs for its portfolios. RBC InvestEase also offers a lower management fee of 0.50%.

The management fee for BMO Smartfolio can go as high as 0.70%. If you want to know more about BMO Smartfolio, you can check out my BMO Smartfolio Review.

RBC InvestEase vs. Questwealth

Questwealth is another significant product in the Canadian robo-advisor market. Brought to you by Questrade, the robo-advisor offers some of the lowest fees among its peers despite having actively managed portfolios.

Questrade also provides you with a team that works behind the scenes to manage your ETF portfolio. Questrade has a minimum account balance requirement of $1,000 – much higher than RBC InvestEase’s $100.

It also remains competitive with RBC InvestEase when it comes to management fees. If you want to find out more about Questwealth, you can check out my Questwealth Review.

	RBC InvestEase	Wealthsimple	Questwealth	BMO SmartFolio
Management Fees	0.50%	0.40%-0.50% per year	0.20%-0.25% per year	0.40%-0.70% per year
MER	0.18%-0.30%	Around 0.2%	0.11%-0.23%	0.25% – 0.35%
Minimum Balance	$100	$1	$1,000	$1,000

Conclusion

Overall, I would not recommend InvestEase that strongly unless you already bank with RBC. I feel that there are other stronger robo-advisors out there, which you can find on my full list here.

While it lacks a tiered pricing structure for higher account balances, RBC InvestEase offers responsible investing options.

The management fees are in line with many other robo-advisors in Canada. It’s a solid big bank choice. You can check out RBC InvestEase here.